8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  April 30, 2009

HERITAGE COMMERCE CORP

(Exact name of registrant as specified in its charter)

California	000-23877	77-0469558
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
150 Almaden Boulevard, San Jose, California		95113
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code:  (408) 947-6900

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 5.02DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.

On December 11, 2008, Heritage Bank of Commerce (subsidiary of Heritage Commerce Corp) (the “Bank”) and James Mayer signed a modification to Mr. Mayer’s employment agreement.  The modification provided that his employment agreement (originally entered into on February 8, 2007) would remain in effect until May 1, 2009 at which time Mr. Mayer would retire from the Bank and receive the severance benefits under the employment agreement.  On April 30, 2009, Mr. Mayer retired from the Bank and Mr. Mayer and the Bank entered into a further modification to his employment agreement.  The modification provides that Mr. Mayer will receive the severance amount set forth in his original employment agreement of $300,000 payable in 18 equal monthly payments of $16,666 per month at such time as the Bank is permitted to make such payments under the American Recovery and Reinvestment Act of 2009 and the U.S. Treasury regulations promulgated thereunder.

A copy of the modification is attached to this report as Exhibit 10.1 and incorporated herein by reference.

ITEM 7.01REGULATION FD DISCLOSURE.

Heritage Commerce Corp (the “Company”) is scheduled to present at the D.A. Davidson 11th Annual Financial Services Conference at the Bell Harbor Conference Center in Seattle.  Lawrence D. McGovern, Chief Financial Officer, and Michael R. Ong, Chief Credit Officer, are scheduled to present on Thursday, May 7th at 10:45 a.m. in the Marina Room.  The presentation will be archived for 90 days after the conference, and can be viewed at http://www.wsw.com/webcast/dadco15/htbk/.  D.A. Davidson & Co. is a full-service investment firm with offices in 16 states.  A copy of the information in the slide show is included as Exhibit 99.1. The information under this Item 7.01 and the information included as exhibit 99.1 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), nor shall it be incorporated by reference into a filing under the Securities Act of 1933, as amended (“Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such a filing.  The furnishing of the information under this Item 7.01 and exhibit 99.1 in this report is not intended to, and does not, constitute a determination or admission by the Company that the information under this Item 7.01 and exhibit 99.1 report is material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Company or any of its affiliates.  The information in the materials is presented as of December 31, 2008, and the Company does not assume any obligations to update such information in the future.

ITEM 9.01FINANCIAL STATEMENTS AND EXHIBITS.

(D) Exhibits

10.1Modification to Employment Agreement of James Mayer dated April 30, 2009.

99.1Slide presentation to investors to be presented on May 7, 2009 by the registrant’s Chief Financial Officer and Chief Credit Officer.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: May 5, 2009
Heritage Commerce Corp
By:	/s/ Lawrence D. McGovern
Name: Lawrence D. McGovern
Executive Vice President and Chief Financial Officer

INDEX TO EXHIBITS

EXHIBIT NO.	DESCRIPTION
10.1	Modification to Employment Agreement of James Mayer dated April 30, 2009.
99.1	Slide presentation to investors to be presented on May 7, 2009 by the registrant’s Chief Financial Officer and Chief Credit Officer

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EX-10.1

Exhibit 10.1

April 30, 2009

Heritage Bank of Commerce

150 Almaden Boulevard

San Jose, CA 95113

James Mayer

2596 Danville Boulevard

Alamo, CA 94501

Gentlemen:

Reference is made to that certain Employment Agreement entered into as of February 8, 2007, as amended December 29, 2008 (“Employment Agreement”) by and between Heritage Bank of Commerce, a California banking corporation (the “Bank”) and James Mayer, an individual (“Executive”) as modified by the Modification Letter Agreement dated December 11, 2008 by and between the Bank and Executive (“Modification”).  Bank and Executive desire to make certain modifications to the Employment Agreement and Modification in accordance with the terms of this Letter Agreement.

Section 6(e)(iii) of the Employment Agreement provides in full as follows:

If Executive gives written notice to the Bank during the 18th full calendar month following the Effective Date of his desire to terminate this Agreement and his employment with an effective date 30 days following the date of delivery of such notice, then the Bank shall accept the notice of termination and pay Executive $300,000, payable $16,666.66 per month for 18 months commencing on the first full calendar month following Executive’s termination date, provided however, that Executive does not breach any of his remaining obligations under this Agreement or the Non-Compete Non Solicitation and Confidentiality Agreement with HCC [Heritage Commerce Corp] and the Bank dated the date hereof.

Pursuant to the Modification, Bank and Executive modified Section 6(e)(iii) of the Employment Agreement.  A copy of the Modification is attached hereto as Exhibit “A”.

Pursuant to the U.S. Treasury Capital Purchase Program authorized by the Troubled Asset Recovery Program (“TARP”) provisions of the Emergency Economic Stabilization Act of 2008 (“EESA”), on November 21, 2008, the Heritage Commerce Corp (parent of the Bank) entered into a Letter Agreement (“Treasury Letter Agreement”) and related Securities Purchase Agreement—Standard Terms with the United States Department of the Treasury, pursuant to which the Company issued and sold (i) 40,000 shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series A, and (ii) a warrant to purchase 462,963 shares of the Company’s common stock, no par value.

The Company has agreed that, until such time as United States Department of the Treasury ceases to own any debt or equity securities of the Company acquired pursuant to the Treasury Letter Agreement, the Company will take all necessary action to ensure that its benefit

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plans with respect to its senior executive officers comply with Section 111(b) of the EESA as implemented by any guidance or regulation under the EESA that has been issued and is in effect as of the date of issuance of the series A preferred stock and the warrant, and has agreed to not adopt any benefit plans with respect to, or which covers, its senior executive officers that do not comply with the EESA, and the applicable executives have consented to the foregoing.  Executive consented to the provisions of Section 111(b) at the request of the Company.

The American Reinvestment and Recovery Act of 2009 (“ARRA”) became effective February 17, 2009.  ARRA amends Section 111 of EESA to delete old Section 111 in its entirety and to add new Section 111 executive compensation requirements for Capital Purchase Program participants.  ARRA also includes provisions directing the Secretary of the U.S. Treasury to impose additional limits on compensation of executives of companies that participate in the Capital Purchase Program as long as the U.S. Treasury owns the preferred stock of such companies issued under the Capital Purchase Program.

ARRA directs the U.S. Treasury to implement standards for companies to comply with these expanded restrictions.  Until then, the Company is complying with these provisions to the extent it believes reasonably appropriate.  As of the date of this Letter Agreement, the U.S. Treasury has not yet established definitive standards required under ARRA or otherwise issued guidance regarding compliance with ARRA for several of the other expanded requirements.  Therefore, the Company cannot determine at this time the extent of any effect these regulations will have on the Company’s compensation policies, programs or practices.

In view of the uncertainty of the application of ARRA and any rules or regulations promulgated thereunder to the payments agreed to by the Bank and the Executive under the Modification, Bank and Executive have agreed to the following:

1.             At such time as the Bank is permitted under ARRA to make the payments to the Executive under the Modification (such date being the “Initial Payment Date”), the Bank shall remit to Executive: (a) within fifteen (15) business days the aggregate amount of payments that would have been paid to Executive as of the Initial Payment Date if the payments required under the Modification had been made commencing June 1, 2009 and up to the Initial Payment Date and accrued interest from June 1, 2009 to the Initial Payment Date, and (b) any remaining monthly payments when due under the Modification from and after the Initial Payment Date, if any.  Accrued interest shall be at an annual rate equal to the prime rate as published by the Wall Street Journal on December 31 of the immediately preceding year in which the payment is made.  For purposes of example only:  if the Bank is permitted to make the payments under ARRA on June 1, 2010, the Bank would pay Executive within fifteen (15) business days the aggregate amount of $199,999.92 [12 months times $16,666.66], plus accrued interest, and the Bank would continue to pay $16,666.66, per month thereafter for each of the next following six months.  If, on the other hand, Bank is not permitted to make the payments under ARRA until June 1, 2011, the Bank would pay the executive $300,000, plus accrued interest, because by such date all 18 month payments would have been paid to Executive had the payments commenced on June 1, 2009.

2.             Bank agrees that it shall accrue the funds payable to Executive under this Letter Agreement in accordance with its general accounting practices for such type of payments.

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3.             Notwithstanding Paragraph 1 above, if at the time the Executive has a separation from service, which shall have the same meaning as provided in Treasury Regulation section 1.409A-1(h), and the Executive is a “specified employee,” as defined under Treasury Regulation section 1.409A-1(i), any and all amounts payable under this Agreement hereof in connection with such separation from service that constitute deferred compensation subject to section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), as determined by the Bank in its reasonable judgment, and that would (but for this sentence) if paid within six (6) months following such separation from service, cause a penalty tax to be imposed on such amounts under Section 409A, such amounts shall instead be paid on the date that follows the date of such separation from service by six (6) months or such longer time to avoid tax liabilities under Section 409A.Each installment payment to be provided to the Executive under this Agreement shall be a separate “payment” within the meaning of Treasury Regulation section 1.409A-2(b)(2)(i).

4.             If the Executive is determined to have a liability pursuant to Section 409A(a)(1)(B) (the “Liability”) for a payment or payments as a result of this Letter Agreement, the Bank will indemnify and hold Executive harmless from such Liability for six years after the last payment under this Letter Agreement is made.  The Bank shall pay to Executive the amount due for the Liability, if any, as soon as administratively practicable, but in no event later than by end of the calendar year following the year in which Executive remits the amount due for the Liability.  The Bank’s payment for the Liability during one year may not affect its payment of the Liability in any other year.

5.             If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction or federal regulatory agency (including the U.S. Department of Treasury), the other provisions of this Agreement will remain in full force and effect.  Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

6.             This Letter Agreement shall be governed by the laws of the State of California.

7.             Except as provided in this Letter Agreement, the Employment Agreement shall remain in full force and effect without further modifications or amendments.

The parties hereto have executed this Letter Agreement on the date first indicated above.

HERITAGE BANK OF COMMERCE,
a California corporation
By:	Walter T. Kaczmarek
	Walter T. Kaczmarek
	President
	James Mayer
	James Mayer

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EXHIBIT “A”

December 11, 2008

Heritage Commerce Corp

150 Almaden Boulevard

San Jose, CA  95113

James Mayer

2596 Danville Boulevard

Alamo, CA  94501

Gentlemen:

Reference is made to that certain Employment Agreement entered into as of February 8, 2007 (“Employment Agreement”) by and between Heritage Bank of Commerce, a California banking corporation (the “Bank”) and James Mayer, an individual (“Executive”).  Bank and Executive desire to make certain modifications to the Employment Agreement in accordance with the terms of this Letter Agreement.

Section 6(e)(iii) of the Employment Agreement provides in full as follows:

“If Executive gives written notice to the Bank during the 18th full calendar month following the Effective Date of his desire to terminate this Agreement and his employment with an effective date 30 days following the date of delivery of such notice, then the Bank shall accept the notice of termination and pay Executive $300,000, payable $16,666.66 per month for 18 months commencing on the first full calendar month following Executive’s termination date, provided however, that Executive does not breach any of his remaining obligations under this Agreement or the Non-Compete Non Solicitation and Confidentiality Agreement with HCC [Heritage Commerce Corp] and the Bank dated the date hereof.”

Bank and Executive desire to modify Section 6(e)(iii) and hereby agree as follows:

1.             Executive hereby gives written notice to the Bank that Executive desires to terminate his employment with such termination to be effective May 1, 2009.  Executive shall remain an employee of Bank and the Term of his employment (as defined in the Employment Agreement) shall remain in force until May 1, 2009.

2.             Bank hereby accepts Executive’s notice of termination of employment to be effective May 1, 2009 and agrees to pay to Executive $300,000, payable $16,666.66 per month for 18 months commencing on June 1, 2009, provided, however, that Executive does not breach any of his remaining obligations under the Employment Agreement which by their terms continue after the Term of the Employment Agreement or the terms of that certain Non-Compete Non-Solicitation and Confidentiality Agreement by and among Heritage Commerce Corp, the Bank and the Executive dated February 8, 2007.

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3.             For purposes of Section 5.7 of the Employment Agreement, the “Date of Termination” shall be May 1, 2009, provided, however, that if Executive’s employment is terminated prior to May 1, 2009 under the terms of the Employment Agreement other than Section 6(e)(iii) or this Letter Agreement, the “Date of Termination” shall be as provided in Section 5.7.

Except as provided in this Letter Agreement, the Employment Agreement shall remain in full force and effect without further modifications or amendments.

The parties hereto have executed this Letter Agreement on the date first indicated above.

HERITAGE BANK OF COMMERCE,
a California banking corporation
By:	/s/ / Walter T. Kaczmarek
	Walter T. Kaczmarek
	President
/s/ James Mayer
James Mayer

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EX-99.1

 May 7, 2009

Forward Looking Statement Disclaimer Forward-looking statements are based on management's knowledge and belief as of today and include information concerning the Company's possible or assumed future financial condition, and its results of operations, business and earnings outlook. These forward-looking statements are subject to risks and uncertainties. A number of factors, some of which are beyond the Company's ability to control or predict, could cause future results to differ materially from those contemplated by such forward-looking statements. These factors include (1) difficult and adverse conditions in the global and domestic capital and credit markets, (2) continued volatility and further deterioration of the capital and credit markets, (3) significant changes in banking laws or regulations, including, without limitation, as a result of the Emergency Economic Stabilization Act and the creation of and possible amendments to the Troubled Asset Relief Program (TARP), including the Capital Purchase Program and related executive compensation requirements, (4) continued uncertainty about the impact of TARP and other recent federal programs on the financial markets including levels of volatility and credit availability, (5) a more adverse than expected decline or continued weakness in general business and economic conditions, either nationally, regionally or locally in areas where the Company conducts its business, which may affect, among other things, the level of nonperforming assets, charge-offs and provision expense, (6) changes in interest rates, reducing interest rate margins or increasing interest rate risks, (7) changes in market liquidity which may reduce interest margins and impact funding sources, (8) increased competition in the company's markets, (9) changes in the financial performance and/or condition of the company's borrowers, (10) current and further deterioration in the housing and commercial real estate markets particularly in California, and (11) increases in Federal Deposit Insurance Corporation premiums due to market developments and regulatory changes. For a discussion of factors which could cause results to differ, please see the Company's reports on Forms 10-K and 10-Q as filed with the Securities and Exchange Commission and the Company's press releases. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.

Heritage Commerce Corp Profile 10 full service branch offices in Santa Clara, Alameda, and Contra Costa counties in California. Heritage Bank of Commerce is a California state chartered bank opened in 1994. Heritage Commerce Corp was organized in 1997 to be the holding company for Heritage Bank of Commerce. A multi-community independent bank that offers a full range of banking services to small to medium sized businesses and their owners, managers and employees. Acquired Diablo Valley Bank in June 2007. Signed an agreement to purchase the deposits of two branches of Wachovia Bank, N.A., a subsidiary of Wells Fargo & Company, in Santa Cruz, CA and Monterey, CA in March 2009. $1.5 Billion Total Assets at March 31, 2009.

Community Business Banking Core Clientele: Closely held businesses Middle market and small businesses Professionals High net worth individuals Specialty Expertise SBA lending Interim construction lending Cash management

Acquisition of Wachovia Branches In March 2009, Heritage signed a definitive agreement to purchase two Wachovia branches from Wells Fargo in Santa Cruz, CA and Monterey, CA. The transaction is subject to bank regulatory approval. Anticipated close in the third quarter of 2009. Total deposits for the two branches as of December 31, 2008 were $463,227,000. No loans were acquired as part of the transaction. $237,460,000 in Santa Cruz $225,767,000 in Monterey

Bay Area Franchise – 10 Branches (12 after Purchase of Wachovia Branches in 3Q 09) Contra Costa County Danville Walnut Creek Alameda County Fremont Pleasanton Santa Clara County Gilroy Los Altos Los Gatos Morgan Hill Mountain View San Jose (Headquarters) Monterey County Santa Cruz County

Recent Key Events Acquired Diablo Valley Bank in June 2007 Two East Bay locations – Danville and Pleasanton Founded in late 2003 Community business bank with $250MM in assets Decision drivers: Primary target for growth in 2006-2007 was the East Bay High growth bank in East Bay market with good locations Outstanding people Similar customer base and products

Recent Key Events (continued) Walnut Creek Regional Office Opened in August 2007 Key commercial market in East Bay Key Personnel Acquisitions Hired premier loan team in Pleasanton market Hired SBA management/sales team Hired successful deposit generators in key markets Changed SBA strategy to a Loan Hold vs. Loan Sale

Heritage Financial Summary Financial Results at March 31, 2009 Net loss of $4.0 million Net loss available to common shareholders of $4.5 million $(0.38) per diluted common share $10.4 million provision for loan losses 3.35% net interest margin 13 basis points decrease due to loans placed on nonaccrual Increase in noninterest expense due to: Higher FDIC premiums Professional fees Severance expense Tax benefit due to net operating loss carryback Credit Quality at March 31, 2009 3.89% NPA/Assets $11.5 million net charge-offs 1.97% Allowance for loan losses/Total loans $10.4 million provision for loan losses

Heritage Financial Summary (continued) Balance Sheet at March 31, 2009 $1,211 million total loans $1,166 million total deposits $1,461 million total assets $180 million total equity Balance Sheet Growth at March 31, 2009, since March 31, 2008 7% Loan growth Internally generated Capital at March 31, 2009 10.41% Leverage ratio 6.72% Tangible common equity/Tangible assets $40 million preferred stock from U.S. Treasury Capital Purchase Program (tier 1 capital) in November 2008

Balance Sheet ($ in millions) $709 $847 $1,037 $1,036 $1,064 $1,347 $1,249 $1,154 $1,499 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 2006 2007 2008 Total Loans Total Deposits Total Assets

Financial Results ROAA ROAE Efficiency Ratio Net Interest Margin 55% 60% 65% 70% 75% 2006 2007 2008 3.00% 3.50% 4.00% 4.50% 5.00% 2006 2007 2008 1.50% 1.25% 1.00% 0.75% 0.50% 0.25% 0.00% 2006 2007 2008 16.00% 12.00% 8.00% 4.00% 0.00% 2006 2007 2008

Solid Capital Base At March 31, 2009 10.41% Leverage Ratio 12.34% Equity/Assets $40 million Preferred Stock from U.S. Treasury Capital Purchase Program Shareholders' Equity $0 $25 $50 $75 $100 $125 $150 $175 $200 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1Q 09 ($ in millions)

Loan Portfolio As of March 31, 2009 $1,210,571,000 Land & Construction 20% Commercial RE 34% C & I 41% Other 5%

Land & Construction Portfolio As of March 31, 2009 $244,181,000 Construction - Commercial O/O 4% Construction - Commercial I/P 27% Construction "For Sale" Housing 45% Construction - SFR O/O 5% Land - Commercial Use 4% Land - Residential Inventory 6% Land - Residential To Be Developed 9%

Commercial Real Estate Portfolio As of March 31, 2009 $406,182,000 Office - I/P 12% Owner Occupied (Office, Industrial, Retail, Other) 51% Retail - I/P 11% Light Industrial/Warehouse/R&D - I/P 11% Mixed Use 3% Other 12%

Credit Quality As of March 31, 2009 Nonperforming Assets Net Charge-offs $56,867,000 $11,527,000 C & I - 58% CRE - 5% SBA - 3% Land & Construction - 34% C & I - 19% CRE - 9% SBA - 15% Land & Construction - 56% OREO - 1%

Credit Quality (continued) 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 2003 2004 2005 2006 2007 2008 1Q 09 NPA/Total Assets ALL/Loans

Deposit Mix by Type As of March 31, 2009 $1,166,003,000 Time Deposits, $100K & over 15% Brokered Deposits 17% DDA Non- interest Bearing 22% DDA Interest Bearing 11% Savings and Money Market 31% Time Deposits, under $100K 4%

Strategy: Position Bank for Return to Top Quartile Performance in 2010 Focus on Credit Quality Reduce CRE and construction & land loan levels Originate fewer real estate loans Enhanced diligence in monitoring existing portfolios Add Special Assets staff Quarterly review of the loan portfolio credit quality Review real estate portfolio credit quality twice quarterly Most real estate loans approved by Executive Loan Committee Maintain Solid Capital Position Issued $40 million in TARP preferred stock 10.41% Leverage ratio 6.72% Tangible common equity/Tangible assets Focus on Liquidity Lender bonus plan includes deposit hurdles Reward deposit officers Target new deposit niches Maintain lines of credit Specialized deposits Review other liquidity options, such as: Branch opportunities Deposit campaigns

Strategy (continued): Position Bank for Return to Top Quartile Performance in 2010 Improve Net Interest Margin Increase loan rates Aggressively add floors on floating rate loans Manage deposit interest rates Control Costs Return to a reasonable efficiency ratio Reduction in FTE Reduction of employee benefits Renegotiated technology contracts Consolidated two Los Altos branches

Heritage Bank Strengths Capital position Management depth Highly experienced relationship managers Strong locations Brand recognition in the Santa Clara County Growing brand recognition in the East Bay Strong service levels Branch acquisition will increase liquidity

Contact Information Walter T. Kaczmarek President and Chief Executive Officer 408.494.4500 Lawrence D. McGovern Executive Vice President Chief Financial Officer 408.494.4562 Michael R. Ong Executive Vice President Chief Credit Officer 408.494.4535 Corporate Headquarters 150 Almaden Boulevard San Jose, CA 95113 NASDAQ: HTBK